We use cookies to give you the best online experience. By using our website you agree to our use of cookies in accordance with our cookie policy. Learn more here.Close Me
On June 8, 2012, the Securities and Exchange Commission
("SEC") released amendments to Rule 206(4)-5 (the
"Pay to Play Rule") under the Investment Advisers Act of
1940 (the "Advisers Act"), which extends the date on
which covered advisers must comply with the ban on payment to
certain third party solicitors.
The Pay to Play Rule prohibits covered advisers from engaging
any third party to solicit government entities on behalf of the
advisor, unless such third party is a "regulated person"
and is subject to rules governing pay-to-play practices that are
determined by the SEC to be at least as stringent as the Rule and
consistent with the objectives of the Rule. "Regulated
persons" include: (i) SEC registered investments advisers,
(ii) SEC registered broker-dealers that are members of FINRA, and
(iii) "municipal advisors," defined as a person
registered as such pursuant to Section 15B of the Securities
Exchange Act of 1934 and subject to the rules of the Municipal
Securities Rulemaking Board. Registration as a municipal advisor is
expected to be required of any person that either provides advisory
services to any municipal entities, or that solicits municipal
entities for advisory services offered by others (other than
certain exempted solicitation activities by an SEC registered
broker-dealer or investment adviser on behalf of an affiliated
investment adviser).
The revised compliance date for the solicitor component of the
Pay to Play Rule, originally set for June 13, 2012, will be nine
months following the compliance date for the SEC's rule
governing registration of municipal advisors under the Securities
Exchange Act of 1934 (not as yet released).
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
A senior SEC lawyer has recently encouraged the private equity and hedge fund communities to consider whether certain practices of private fund managers could subject these firms to SEC registration as broker-dealers.
In November 2012, the U.S. District Court for the Eastern District of New York preliminarily approved a settlement agreement in the In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation.
Federal bank regulatory agencies have served notice that deposit advance products will soon be subject to significant new restrictions and heightened supervisory scrutiny.
